Reich: Jobs Market in Worst Shape Since Great Depression

Economist Robert Reich says America’s ongoing jobs depression, "which is what it deserves to be called, is the worst economic calamity to hit this nation since the Great Depression."

"It’s also terrible news for President Obama, whose chances for re-election now depend almost entirely on the Republican party putting up someone so vacuous and extremist that the nation rallies to Obama regardless," Reich writes in his blog.

The problem is on the demand side, wrote Reich, now a professor of public policy at the University of California at Berkeley.
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"Consumers (whose spending is 70 percent of the economy) can’t boost the American economy on their own," he notes. "They’re still too burdened by debt, especially on homes that are worth less than their mortgages."

Robert Reich
(Associated Press photo)

"In addition, their jobs are disappearing, their pay is dropping, their medical bills are soaring," wrote Reich, who served in three national administrations and was a secretary of labor under President Bill Clinton.

Consumer spending slowed again in August as incomes dropped, and businesses won’t hire without more sales.

The answer, Reich says, is for government to hire people directly to maintain the nation’s parks and playgrounds and to help in schools and hospitals.

"It can funnel money to help cash-starved states and local government so they don’t have to continue to slash payrolls and public services," notes Reich.

"And it can hire indirectly — contracting with companies to build schools, revamp public transportation and rebuild the nation’s crumbling highways, bridges and ports."

"Not only does this create jobs but also puts money in the hands of all the people who get the jobs, so they can turn around and buy the goods and services they need — generating more jobs,” he wrote.

“Not exactly rocket science."

Bloomberg reports that gains in U.S. payrolls in September were probably too small to reduce joblessness and manufacturing almost stalled as concern mounted that the global recovery was losing momentum.

Economist Robert Reich says America s ongoing jobs depression, which is what it deserves to be called, is the worst economic calamity to hit this nation since the Great Depression.
It s also terrible news for President Obama, whose chances for re-election now depend...